DENMARK - The DKK371.5bn (€49.6bn) Danish labour market pension fund ATP has pre-selected Citigroup and Northern Trust as candidates for a new global custody agreement.

ATP, Arbejdsmarkedets Tillaegspension, said in a tender note that the four-year contract, which it expects to have in place by the end of 2007, would replace an existing agreement with Nordea.

A Danish market spokesman for Nordea was unaware of the tender but pointed out that custody made up only a small part of the bank's business. ATP's Stig Lund Andersen was not available for comment.

The custodian will handle listed and unlisted equities, money-market instruments and derivatives. The fund also expects the custodian to support the Folkebørsen - the 200-fund electronic marketplace that allows account holders to invest in collective investment schemes online.

Tenders must also include a separate offer of services for mutual funds in ATP Invest, the fund's account-holding institution.

The custodian would "not only live up to the highest international standards, but also contribute to setting new standards", it said.

The fund is demanding that potential custodians bid for all custody services. It may then select either a single custodian or multiple players for the contract.